If Joe receives an increase in his wage rate and decides to decrease his hours worked, the
A) substitution effect and the income effect must be equal.
B) substitution effect must exceed the income effect.
C) income effect must exceed the substitution effect.
D) substitution effect must be zero.
C
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A recession is commonly defined as occurring when
A) real GDP decreases for a period of 12 or more months. B) real GDP decreases for a period of 6 or more months. C) the unemployment rate rises above 7.5 percent for 6 or more months. D) the unemployment rate rises above 5.0 percent for 12 or more months.
The short run is a time frame in which
A) the quantities of some factors of production are fixed and the quantities of other factors of production can be varied. B) the quantities of all factors of production can be varied. C) the quantities of all factors of production are fixed. D) all costs are sunk costs.
If a dollar a year from now will likely have less purchasing power because of inflation, then a dollar today ________ a dollar a year from now
A) is more valuable than B) has the same value as C) is less valuable than D) may be more valuable or less valuable than
The reserve ratio refers to the ratio of a bank's:
A. reserves to its liabilities and net worth. B. capital stock to its total assets. C. checkable deposits to its total liabilities. D. required reserves to its checkable-deposit liabilities.